How the Best Practices Process Opens the Door to Growth

Introduction

• Author: Jennifer Becker
• Published by: Independent Insurance Agents & Brokers of America, Inc.
• Context: Utilization of Best Practices process for agency growth

Best Practices Study

• Released annually by "Big I" and Reagan Consulting.
• Targets agencies with measurable success.
• Data collection and objective scoring to identify "Best Practices agencies."
• 3,000 data points used for agency performance comparison.

Benefits of Best Practices

• Allows agencies of all sizes to compare performance.
• Creates a performance dashboard for measuring success.
• Helps in tracking the right information for optimal agency operations.
• Agencies categorized into six revenue categories for accurate comparison.

Process for Utilizing Best Practices

1. Select a Metric
   • Begin with one performance metric.
   • Review results and address performance gaps using tools or education.
2. Growth vs. Profitability
   • Growth is prioritized over profitability for valuation.
   • Sales velocity metric as a starting point: New business written/current year's commissions and fees.
3. Measuring Success
   • Use Best Practices benchmarks to understand standing against similar revenue category firms.

Important Metrics

• Sales Velocity: Indicator of long-term agency success.
• Organic Growth Rate: Measures agency's natural growth.
• Weighted Average Shareholder Age (WASA): Indicates readiness for perpetuation.
• Weighted Average Shareholder Producer Age (WAPA): Evaluates perpetuation preparedness.
• Net Investment in Unvalidated Producer Pay (NUPP): Assesses new talent investment.

Getting Started

• Download Excel Comparison Workbook from Big "I" Best Practices webpage.
• Compare year-end results with Best Practices agencies.
• Calculate performance gaps in revenue, growth, expenses, profit, finance, staffing, and producer metrics.

Becoming a Best Practices Agency

• If aligned with Best Practices results, consider participating.
• Opportunities arise every three years.
• Participation grants prestigious status and opens doors to various benefits.

Conclusion

• Best Practices process beneficial for agency management.
• Helps reveal success, validate decisions, and highlight opportunities.
• Agencies achieving status gain recognition and further opportunities for growth.

• For more information, contact Jennifer Becker at [email protected].
• Access more data and apply for Best Practices agency here.__